Tuesday, September 20, 2016

While tackling shadow IT isn't the most prominent challenge on a CIO's growing to do list, the widespread growth of the practice in recent years has become hard to ignore.

It wasn't that long ago when research firm Gartner predicted that by 2017, marketing departments would end up spending more on IT than IT departments and since then the use of IT services in other business has exploded to the point that Gartner's prediction is not too far off from being vindicated.

You'd be hard pressed to find a CIO or IT professional who is loving the explosion in IT spend by other business units as it undermines IT departments and even brings into question the need for CIO's.Executives outside the IT department have defended their increased IT spend by accusing CIO's of being too restrictive and rigid.

There's some truth to this complaint as CIO's have traditionally been less than willing to introduce new solutions, particularly those provided by startups. The unwillingness of CIO's to introduce new solutions forced software vendors to target other business units within theirorganizationwhich has led to the increased use of IT solutions without the CIO's blessing.

The growth of shadow IT in the last five years has concerned CIO's across the board with IT leaders responsible for fewer and fewer IT buying decisions. However, what really keeps CIO's up at night is the security vulnerabilities shadow IT can potentially opens their organization to.

Despite most organizations having strict policies in place forbidding its workforce from using third party applications to handle company data, it's well known these rues are flouted with abandon. You would think this might lead to some type of punitive action taken on employees whoflout these rules but since only 8% of organizations can track the use ofshadow IT, finding and reprimanding employees is easier said than done to say the least 1.

It's quite scary to think that only a measly 8% of organizationscan track the use of shadow IT as it means a staggering 92% of companies are devising security and device management policies in the dark. What's even more terrifying is that should organizations that make up the 92% suffer a breach, their CIO won't know what hit them until it's too late.

This scenario is very likely to become the norm as according to a survey carried out by Intel Security, a worrying 23% "handle security without IT's help"2. Why this is happening when in most cases these departments are justa phone call awayfrom each other is crazy and is a disaster waiting to happen.

In sum, leadership at theseorganizations are going to have to figure out fast how to track the use of shadow and find a way to bring IT into the conversation or risk being getting hacked and beefing up their lawyer's retainers.

In a world increasingly dominated by a handful of powerful and deep pocketed corporations, there's a strong arguments that Google's and Facebook's duopoly has the greatest implications for everybody.

The implications of Google's and Facebook's ad market dominance are far and wide ranging particularly for publishers as Google and Facebook end up sucking mostthe new and existing value in the digital ad market leaving publishers fight each other over the scraps with ad tech companies and new players such as Verizon with recent purchase of former search giants Yahoo.

The main and frankly dangerous implications of the Google and Facebook duopoly is that with their dominant market position, Publishers have no choice but turn to either company to retrieve ad dollars they already lost to google and Facebook in the marketplace. Even more concerning is that both Google and Facebook are looking to wrest more control over the content produced by publisher through initiatives. Facebook recently opened up their instant articles to everyone which allows content creators to post content on the platform directly in a ploy to stop users leaving their site which affects Facebook ability to monetise their data.

Facebook's ploy has worked a treat as a recent study carried out by the Reuters Institute for the Study of Journalism revealed that over 50% "of all web users use social media for news each week" as both Facebook and Google become "destinations in their own right" 1.

This trend looks set to continue with the rise of ad blocking pushing publishers further into the thrall of the Google and Facebook duopoly. While ad blocking effects both Google and Facebook, the use of ad blockers can be what brings publishers to their knees as it affects their ability to monetise their inventory. Unless the Facebook/Google falls ( which is hard to even imagine), the near and long term future for the publishing industry looks bleak to say the least. However, there are a growingof threats developing to bring the great Google/Facebook duopoly crashing down.

Thenumber of threats to Google's and Facebook's dominance of the digital ad market are myriad but the most concerning the duopoly by far is the rise of ad blocking. Both companies have admitted the popularity of ad blockers is a problem and also that ad blocking can potentially affect their future ad blocking. Google has taken more drastic steps than Facebook in combating ad blockers with the Mountain View based company hired a 1,000 strong staff to take down 780 million crappy ads last year 2.

Google have also put a lot pressure over the last few years on webmasters to improve their sites from threatening them lower page rankings if they don't make their sites mobile friendly in it's tussle with Facebook for mobile ad dollars but should consumers take to ad blocking at the rate they have on desktops, Google's search ad advertising empire could start to crumble fast.

Facebook have also taken action with the Menlo Park based company banning the use of ad blockers as Facebook looks to protect its ad revenue which represents 96% of their revenues in total 3. Google are just as reliant on ads as Facebook if not even more which makes ad blocking a serious threat to the duopoly.

However, despite much of the press donated to the rise of ad blocking and its effects on the digital ad market, the biggest threat to the Google/Facebook duopoly is Apple and its quest to hobble Google by any means necessary. Apple, like Facebook, competes with Google in a number of markets but where they compete the fiercest in the mobile Os market which is dominated by Google's Os Android which has a market share of just over 80% 4. However, Apple is one part of a long term smartphone duopoly with Samsung still shipping millions of iPhones and over a billion since the first iPhone was released ten years ago 5.

While the popularity of the iPhone has waned of late sales wise, Apple's dominant position in the smartphone market has allowedAppleto create a large mobile app store which aggressively competes with Google own mobile app store (Google Play)for app developers to sell their apps on their platform despite iOs's (Apple's mobile Os) weak market position in comparison to Android.

The truly brutal competition between the two companies spawned probably the blatantattempt to destroy a competitor as Apple spitefully opened their app store to ad blockers last year and even went as far remove ad blocker that affected, you guessed it, Facebook 6. While this was clear shot in Google's direction,the group most affected by their decision was publishers. If it wasn't bad enough that Google inexplicably allows ad blockers in it's own app store, Apple exposing its large user base to ad blocking apps put publishers under a great of pressure as ad blockers continue to eat into their ad revenues.

Google definitely felt the shot sent by Appleas they missed Q1 exceptions earlier this year 7. Despite having a better relationship with Apple, Facebook have also beenfeeling the heat of late as the company has been willing to admit that ad blockers pose a threat to future earnings despite its attempts to deal with the ad blocking phenomenon.

However, despite the recent challenges offered by Apple and ad blocking, both Google and Facebook are going to be quite difficult to uproot from their shared perches in the digital ad market.